The causal effect of road concessions on road safety

Abstract

Reducing road fatalities is a key policy concern in several countries. Nonetheless, there is limited evidence on whether highway concessions and Public Private Partnerships (PPP) can bring road safety benefits, despite the growing number of countries adopting this policy to finance and manage road infrastructure. In this paper, we use a difference-in-differences approach to examine the causal effect of highway concessions on road safety outcomes using daily crash data from Brazilian Federal highways between 2007-2017. We find that concessions significantly improve road safety measures, including fatality rates and the number of people and vehicles involved in crashes. On average, procured roads had 15 fewer deaths then publicly managed highways for every 1000 crashes each year, and avoided 16 thousand deaths between 2007-2017. Moreover, these effects are marginally larger for every additional year of treatment but only become statistically significant a few years after the concession implementation. Finally, our results suggest that including safety-based incentives in concession contracts can substantially improve road safety performance.